The world number eight, whose U.S. Open third round exit last week was the latest in a series of disappointing results, joins seventh-ranked David Ferrer, Fernando Verdasco and Robert Bautista for the Sept. 18-20 tie in Odense.
Spain dropped out of the top tier for the first time since 1996 when a severely depleted team lost their World Group playoff to Brazil last year.
They then let slip a 2-0 lead in their Group I tie with Russia in July and cannot return to the World Group until at least 2017.
Nadal has won 21 of his 22 Davis Cup singles matches and with Ferrer, who has only lost four in 27, also in the side Spain should be far too strong for Denmark, even on an indoor hardcourt instead of their favoured clay.
"We have a spectacular team," captain Conchita Martinez told a news conference.
"It's always dangerous playing outside Spain where the conditions will obviously favour the home side. We hope the court is not too fast."
Nadal, Ferrer and most of Spain's other top players did not make themselves available for last year's tie against Brazil in protest at the Spanish tennis federation's decision to appoint Gala Leon as their first female Davis Cup captain.
After months of bickering Leon was sacked in July and former Wimbledon champion Martinez, who turned to coaching after she retired in 2006 and is also Spain's Fed Cup captain, was appointed until the end of the year.
(Writing by Iain Rogers, editing by Tony Jimenez)
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